Effects of price promotions on purchase intentions in post-promotion periods

The objective of this study is to examine the effects of price promotions on consumers’ purchase intentions. We want to show that purchase intentions in a period with no promotion are lower when consumers have previously had contact with a price promotion than when they have had no contact with a price promotion. In order to do so, we compare purchase intentions before contact with a price promotion, purchase intentions during the promotion period, and purchase intentions in the post-promotion period. In addition, we look at the psychological mechanisms underlying the observed effects. We examine possible effects through reductions of consumers’ reference price and willingness to pay because these two distinct concepts represent the most important price beliefs in the considered context. The study results provide support for our basic assumption. The findings additionally show that the negative change of purchase intentions is directly linked to a reduction of willingness to pay and indirectly linked to a reduction of consumers’ reference price after contact with a promotion.